How Bloomberg Fabricates U.S. Housing Numbers

Being one of the most vigilant observers of the U.S. housing market – as well as one of the most vociferous critics of fraudulent “statistics”, there was little chance that Bloomberg's attempt to “rewrite history” would slip past me.

Here is what Bloomberg wrote on February 3rd of this year:

A record 19 million U.S. homes stood empty at the end of 2008...

Here is the new version of “history” which Bloomberg spewed out Thursday:

About 18.8 million homes stood empty in the U.S. during the third quarter...The record-high was in the first quarter [of 2009] when 18.95 million homes were vacant.

Unless the U.S. propaganda-machine has also re-written the rules of arithmetic, then the 19 million empty homes which Bloomberg reported for last year (in February) is a larger number than the 18.95 million which Bloomberg claimed was a record this year.

Admittedly, as far as statistical lies go, this particular example is hardly earth-shattering. However, what is important is it clearly established the fact that U.S. propagandists are simply inventing numbers when they report “statistics”.

The really important departure from reality is how Bloomberg (and the rest of the U.S. propaganda-machine) have simply ignored the millions of already-foreclosed properties which U.S. banks are hiding from the market.

As I demonstrated in “Fantasy Housing Numbers a Prelude for NEXT U.S. Housing Crash”, U.S. banks are on track to record close to 5 million foreclosures and repossessions – just in the current year. However, they are only on pace to sell about 1.5 “distressed properties” (which also include “short sales”). This simple arithmetic means that U.S. banks are adding at least 3.5 million empty homes to the millions of foreclosed properties they were already holding off the market prior to this year.

Obviously, if there were 19 million empty homes at the end of 2008, and at least 3.5 million more empty homes this year (just counting only those being held by U.S. banks), then the real total of U.S. empty homes today would be at least 22 million. Clearly, Bloomberg's claim of 18.8 million empty homes in the U.S. in the 3rd quarter of this year has absolutely no connection to the “real world”.

Presumably a major news organization like Bloomberg is able to keep track of its own prior published articles, which strongly suggests the deliberate attempt to deceive. Interestingly, Bloomberg's previous report on U.S. empty homes provides some data which strongly supports my assertion that U.S. banks have been accumulating vast quantities of foreclosed properties.

Bloomberg noted in February that at the end of the 3rd quarter of 2008 U.S. banks were holding $11.5 billion worth of foreclosed properties (in nominal value) – more than double what they held a year earlier. This doubling of the banks' inventories of foreclosed properties occurred during a year when there were 'only' 2.2 million foreclosures.

This year, U.S. banks are on pace to nearly double the total number of foreclosures from 2008 – yet all the reports from U.S. propaganda outlets indicate declining inventories of unsold homes, month after month.

This farce also extends to the new home market – except the fabrications are even more extreme. U.S. home-builders have been building roughly 50% more homes than they are selling, for every month for the last two years. This is why the U.S. propagandists never report “new home sales” and “new home starts” in the same article. Despite this horrendous discrepancy, and a long-term trend which can only end with mass-bankruptcies among home-builders, “inventories” of new homes have been reported as declining every month.

This sham just hit a new level of absurdity this week. When “new home sales” were reported this week, there was a “surprising” decline in the latest reading – and the previous month's number was revised lower. Yet in the same piece of propaganda it was reported that the inventory of new homes still supposedly declined in the last month.

Putting aside the huge, existing gap between new home starts and sales, one would think that the compulsive liars of the U.S. propaganda-machine would not have the audacity to report increasing “starts” of new homes, decreasing sales – and still claim that inventories were falling. Clearly this is nothing less than a "slap in the face" for market sheep - who are presumed to be so brain-dead that the propagandists can write 100% contradictory "facts" in the same article, and expect no one to notice.

Returning to the millions of foreclosed properties which U.S. banks are holding off the market, obviously part of the reason for this was to try to halt the collapse in housing prices. If U.S. banks had dumped an additional 5+ million homes onto the market (equal to a full year of demand by itself) then instead of the collapse in U.S. housing prices easing, it would still be accelerating.

However, as I pointed out in “Who OWNS Foreclosed U.S. Properties, Part II: the role of MERS”, there is a second reason for U.S. banks to hide all these millions of foreclosed properties: credit default swaps. This $50+ trillion market represents the phony “insurance” on the entire Wall Street Ponzi-scheme – which was the key to (so-called) “regulators” allowing the U.S. financial crime syndicate to leverage the entire financial sector by an utterly insane average of 30:1.

Now, with the U.S. housing market collapsing, these credit default swaps are being triggered. Selling these foreclosed properties locks-in the banks' losses – causing these massive obligations to come due. As I illustrated in “Bankster Sues Bankster – AGAIN”, in one example of a credit default swap, Citigroup (C) is suing Morgan Stanley (MS) to collect on this contract.

Even after the “collateral” which “backed” this insurance was liquidated, Morgan Stanley is still facing a pay-out of more than 300:1 based on the premiums it received for this insurance. While not every CDS will require 300:1 pay-outs, there is no reason that some of these payments could not exceed 300:1 – given the gross negligence of regulators in not requiring adequate collateral for this $50+ trillion “insurance market”.

If you take the billions in losses which U.S. banks are racking-up on foreclosed U.S. properties, and then start making 300:1 pay-outs on those losses, it doesn't take long for the entire U.S. financial system to appear hopelessly insolvent – even with the new, fraudulent accounting rules enacted in the U.S. in April.

For the benefit of new readers, I will repeat my warning: it is perilous to accept any U.S. government-reported statistics at “face value”. The absurd reading on 3rd-quarter GDP is a prime example.

The U.S. economy is supposedly now growing at a robust 3.5% annual rate. Wall Street is reporting “record profits” (and paying record bonuses). Yet the state of New York is desperately trying to close a $3 BILLION budget-gap – which has materialized over the same quarter where both Wall Street and the broader U.S. economy are supposedly thriving. Apparently Wall Street's fantasy "profits" are producing only fantasy tax revenues for the state of New York.

This entire Ponzi-scheme economy continues plunging toward collapse – and formal default on its massive, unpayable debts. Total public and private debt in the U.S. is now approximately $60 trillion, and this completely excludes the roughly $70 trillion in additional “unfunded liabilities” (for the federal government, alone). However, don't expect to hear the truth about this from the U.S. propaganda-machine.

Disclosure: I hold no position in Citigroup or Morgan Stanley

Comments

[lgtccjm:]

I agree. The world has ended. I am merely a virtual creation of the of the government.


On Nov 01 11:00 AM notsosmart wrote:

> this is interesting to me. i dont know this author.he calls wallst
> a ponzi scheme. i have been calling wall st a ponzi/casino scheme
> for years.he points out fraud/propaganda figures.what do you expect
> of a country that papers the world with phony rated AAA crap?what
> is it you expect of lying ceos & lying congress? presidents that
> lie(past & present)?self serving bods & accounting firms?
> a lack of ethics & transparency? a movie industry that tells
> you "greed is good"?contracts have become meaningless.every new law
> has the built in loopholes for the insiders.the whole system is a
> sad joke.unless someone can find a way to turn granite counters into
> oil this country is finished. your children & grandchildren will
> never pay off this debt.our free way of life is shrinking by the
> minute.cameras all over.credit card purchase tracking.ez pass &
> cell phone tracking.LOL out loud about the folks who talk about privacy.
> your every claim for your house,car, & drs visit is logged somewhere.now
> this author is worried about phony figures? too little too late.

Nov 01 11:52 AM

[User 353732:]

You will recall that in Orwell's "1984" the absolute tyranny continually rewrote history so that the past would conform to the ideology and barbarities of the present. This is a defining trope of all corrupt, collectivist and depraved Regimes.
The facts are what the Regime says they are; the truth is whatever glorifies the Regime; success is what most benefits the Regime.

Power, wealth, fame :all up for the WashDc-Wall St- MSM reigning Troika. This is called a great recovery made possible by the ever vigilant and tireless Regime laboring ceaselessly for The People.

Incomes, net worth, employment: all down for the Middle Class , which is as it should be and are the very substance of a recovery, since the middle class is made up of the very social deviants and enemies of The People the Regime so tirelessly warns us about.

There is a Recovery. The Regime has the statistics to prove it and every day ,in its indefatigable search for facts and in its unparalleled love for truth, it discover more, better and bigger statistics.
Only the statistics are real. Everything else is false: unpaid bills, foreclosures, small business bankruptcies, credit curtailments and denials...All fabrications of the remnant that clings to its primitive superstitionsof free markets, free speech, free elections and that biggest superstition of all: the Constitution.

Nov 01 12:08 PM

[Gary A:]

I was thinking that the author may want to look into the retail sales numbers. I think those are fudged as well but how would we prove it?

Nov 01 12:41 PM

[Frugal Joe:]

user 353723...could not have said it better. When I read this article I thought of the scene where the fellow is told to destroy the previously reported numbers and substitute newer and even more unrealistic numbers.......1984 must be the most rented movie out there right now.


On Nov 01 12:08 PM User 353732 wrote:

> You will recall that in Orwell's "1984" the absolute tyranny continually
> rewrote history so that the past would conform to the ideology and
> barbarities of the present. This is a defining trope of all corrupt,
> collectivist and depraved Regimes.
> The facts are what the Regime says they are; the truth is whatever
> glorifies the Regime; success is what most benefits the Regime.
>
>
> Power, wealth, fame :all up for the WashDc-Wall St- MSM reigning
> Troika. This is called a great recovery made possible by the ever
> vigilant and tireless Regime laboring ceaselessly for The People.
>
>
> Incomes, net worth, employment: all down for the Middle Class , which
> is as it should be and are the very substance of a recovery, since
> the middle class is made up of the very social deviants and enemies
> of The People the Regime so tirelessly warns us about.
>
> There is a Recovery. The Regime has the statistics to prove it and
> every day ,in its indefatigable search for facts and in its unparalleled
> love for truth, it discover more, better and bigger statistics.<br/>...
> the statistics are real. Everything else is false: unpaid bills,
> foreclosures, small business bankruptcies, credit curtailments and
> denials...All fabrications of the remnant that clings to its primitive
> superstitionsof free markets, free speech, free elections and that
> biggest superstition of all: the Constitution.

Nov 01 05:23 PM

[Frugal Joe:]

Very detailed article. Sadly, it is true. The middle class sinks deeper every day while the gov spins new tales and fabricates numbers.

"strong dollar"

"recession is over"

and it goes on and on while GS and other investment banks rake in billions ......sad & diabolical.

Nov 01 05:26 PM

[Tomos:]

I never did put any trust in Bloomberg, now I am sure to never put any trust in their reporting.

Nov 01 06:19 PM

[Leftfield:]

Our leaders have ripping us off to a science. Corporate managements cut corners from employees and customers, call it "productivity miracles" and pay themselves wealth beyond my wildest dreams. This is the group who has the revolving door to Washington, who aren't pikers rewarding themselves as middlemen for the greatest wealth transfer and fraud in history.
They've paid off enough voters: Government employees, recipients of government checks, and enough sliced off who can't seem to get a clue, to top 50%. So, the largest ripoff in history proceeds, with the "recovery" we're experiencing now providing another pretend and extend, another bonus period, another bailout until taxpayers are the largest bagholders in history.

Nov 01 07:47 PM

[Seth Chalnick:]

Bravo Mr. Nielson, for publishing the web's first coherent explanation for banks holding back inventory:

"Now, with the U.S. housing market collapsing, these credit default swaps are being triggered. Selling these foreclosed properties locks-in the banks' losses – causing these massive obligations to come due."

Are swaps and derivatives so confusing that the investor consensus assumes that all toxic assets have already been baked into the market outlook?

This is not a rhetorical question.

We witnessed subprime havoc and now it seems most asset manager types have this idea that the toxic assets were all bundled in with prime assets… since nobody knew what was what, and that everything as a whole has already been written down.

But I used to work on Wall Street, and I know that many asset managers are basically just sales guys who push what their analysts tell them to push, and that many analysts types are myopic materialistic ivy league model writers who are driven by peer pressure and perverse incentives to tow the company line.

I'm just a residential real estate guy... but it seems to scream out to me that the prime loans have not yet defaulted... so how could they already be discounted? The subprime assets weren't written down until people defaulted on making payments.

And I see now, with first hand experience, even while everyone is making the call that real estate has bottomed… that a major portion of non-performing loans that defaulted to date (I'd actually say the majority of them) have not yet been dealt with. The mark to market accounting change and the not so subtle short supply of inventory artificially created demand compared to same period last year results... but fundamentally nothing has even changed.

And now we are starting to see the 5yr i/o loans expiring and this bucket of loans is approximately 3 times LARGER than the subprime bucket… with average loan amounts that are LARGER than subprime... and even the same subprime neighborhoods are mostly comprised of hard working blue collar 5yr i/o holders who haven't even been tested yet... unless you count the test of still paying your mortgage on time even though you are earning about 30% less than before while debt payments that are higher than before… even though your deadbeat subprime neighbor walked AFTER getting a loan mod that you deserved but they received and then re-defaulted on because their credit was already shot, etc.

If the 5yr i/o pool is 3 times larger… and it’s not baked in yet… and the default rate is much greater than expected, though only by people who subjectively gauge and report the market’s expectations rather than looking at fundamental math and the recent blueprint that is called the subprime crisis… it seems that smoke and mirrors are perhaps the best chance we may have after all. It’s all starting to make sense now.

Nov 02 01:05 AM

[chris coonan:]

I get a lot of comments from friends, stating, whew, it is all over, glad things are back on track....I can't even respond anymore.

It is good that there are optimists out there.

The statistical game is proving to be very interesting....so when the economy collapses, do they just revise the previous statistics?

Seems like we are living in the book Animal Farm...rules changing in the middle of the night, etc. Or perhaps 1984..., the economy will be retreating to that year anyway....

Nov 02 01:14 AM

[Ani4Ani:]

This isn't accurate. Actual foreclosures this year are only at 670k. The 300k to 350k that RealtyTrac reports each month is the total of foreclosure NOTICES and foreclosures. But foreclosures only average about 75k a month across the US. The pipeline of foreclosure in process held up due to HAMP is massive though - probably 1.5 to 2 million at this point. The shadow foreclosure problem has by and large been solved temporarily because of various foreclosure moratoria, mortgage mod initiatives and the busy low-end selling year in 2009.

It will be accurate, however, when 70% fail their mods which will result in foreclosures surging likely over the near term. The question is...is there enough investor and first time buyer demand to sop it up. The big problem with housing right now is the mid to high end which has fallen off the same cliff as the broader market did in 2007 and is picking up speed on the way down.

Nov 02 08:04 AM

[SusanGrisanti:]

Yes, it's true. 3.5% growth is only one side of the picture. Get your solar panels & water from air machines now. This Titanic is going down fast.

Nov 02 08:19 AM

[adan:]

two things:

and the worst of all these misrepresentations has been and will be a continued mistrust in large financial institutions by most regular people; this could take a lot of work and time to heal -

and, if our stats are bad, what are we to think of the chinese (or any other country whose data we can't begin to hardly analyze) reports?

but it's a two way street, i think - the average american will have to care enough and be willing to put enough effort into learning about the economy and finance, to force our own elected officials to give us the honest adult truth - something we could work from, for sustainability....

Nov 02 08:25 AM

[Doug Francis:]

I once asked a question about new home statistics to a regional housing sector guru (a Ph.D. no doubt) and his answer just raised more flags in my head about the data.

The economy is lucky that so many of the I/O mortgages use LIBOR as their index, so their adjusted rates are now lower than they were. If LIBOR was at 3.5% like a year ago then we would really be sunk!

Yes, LIBOR saves America... for the time being.

Nov 02 08:45 AM

[Dubious Bro...:]

Does anyone know which states represent the top 5 in foreclosures and what % of the total they make up?

Nov 02 08:46 AM

[mavericks:]

I'm going to take the other side of this argument since I own one of those 5-year adjustable loans and I've been paying interest only on 4 of those years. As it turns out, my payments will go DOWN next year if LIBOR stays where it is.

Second, I would think it would be in a bank's best interest to rent out, either to the former owners or somebody else, the homes they foreclose upon and try and wait for home prices to recover before putting them back on the market. If this is the case, would these homes be considered "empty"? Just asking.

Frankly, I think the tone of this article is a bit on the emotional side so that is why I'm questioning it.

Nov 02 09:00 AM

[Rich S:]

You guys all need to get a life. This author is totally whipped up over a variation of 50K. I would imagine that the people at Bloomberg are too busy being product members of society (unlike most of you ranters and ravers) that they consider 50k a rounding error and with the realm of reasonableness--but then most of you don't know what reasonable or sane is.

Nov 02 09:09 AM

[JRA:]

Ever heard of rounding?

The suggestion that there is some statistical inaccuracy in the Bloomberg article is laughable. The first reporter rounded off 18.95 to 19. There is no inaccuracy here, as any mathematician will tell you. The only difference is that the first reporter chose to use a lesser degree of precision than the second did, and the reason is obvious: The latter reporter was comparing the current number to the earlier number, and to accurately report the difference between the two, the numbers had to be cited with greater PRECISION, for if you round off 18.8 and 18.95, they both come to 19.

I'm not sure how anyone who doesn't get this can hope to provide meaningful financial analysis.

Nov 02 09:20 AM

[User 481389:]

I'm not sure you should be trying to prove something you think. You'd be testing a hypothesis if you were objective.


On Nov 01 12:41 PM Gary A wrote:

> I was thinking that the author may want to look into the retail sales
> numbers. I think those are fudged as well but how would we prove
> it?

Nov 02 09:22 AM

[mngordo:]

My comment to the author: "Silence is golden".
If the world is going to end, I think I would rather not know it in advance but thanks for your research.

Nov 02 09:24 AM

[cyaker:]

While I don't deny anything Nielson says or the other commentators above, for that matter nor am I defending Bloomberg but a .003 roundup (18.95/19) in this case is scant evidence that Bloomberg is massaging the numbers. It does give one pause for thought.

Nov 02 09:24 AM

[Mike from NYC:]

'We cannot handle the truth' which is why so much positive BS is spun by companies, news outlets and our government.

The 'Age of Great Abundance' as Peggy Noonan in the WSJ called it is over. However, she failed to state that this age was achieved for the past 20+ years by debt and not anything we really grew as we did in the 50s - early 80s when out trade exports were greater than our imports.

Let's face it ladies and gentlemen, our country is bankrupt and it took an almost fatal financial collapse to wake people up to see this and wake them up from their dreams of sugarplums and fairies - and guess what, most people I speak with are still clueless about the real state of our country and look upon the markets as if they were the Ten Commandments - if the markets are up everything must be OK in LaLa land.

I am clueless and often speechless as to how to get our country on a sound financial path and a REAL sustainable future.

Nov 02 09:35 AM

[Mike from NYC:]

CA, NV, FL, AZ, MI is a good start.


On Nov 02 08:46 AM Dubious Brother wrote:

> Does anyone know which states represent the top 5 in foreclosures
> and what % of the total they make up?

Nov 02 09:36 AM

[Seth Chalnick:]

To the folks who think the low LIBOR rates are going to help things for the time being, you are missing something subtle but huge, which most of America is also missing. 50% of all re-sets will also switch to p&i re-amortized over the remaining 25yrs.

This creates a substantial payment shock even with the rate being lower. When the rate gets back up there, fogettaboudit. If you are one of the "lucky" ones who still gets the i/o option for another 5 years... yes it's true, your monthly pmt goes down while the rates stay low... good luck though in another 5 years when the remaining balance re-amortizes to the remaining 20yrs.

It does not matter if you are "well insulated". It matters that even a small percentage of your neighbors (in real life a huge percentage) are not. They will go to refi. They will not be approved. They will try to short sell. They will not be able to. They will walk. Your property value will go down for real this time.

Nov 02 09:54 AM

[Old Rick:]

Supporting data please??


On Nov 02 09:09 AM Rich S wrote:

> You guys all need to get a life. This author is totally whipped
> up over a variation of 50K. I would imagine that the people at Bloomberg
> are too busy being product members of society (unlike most of you
> ranters and ravers) that they consider 50k a rounding error and with
> the realm of reasonableness--but then most of you don't know what
> reasonable or sane is.

Nov 02 09:55 AM

[charst46:]

Of the 130,000,000 the difference between 19 million and 18.5 million is not very significant 0.3%, 3 tenths of 1 percent. Granted a small community somewhere, but a rounding error. That is a difference without significance. Particularly when the real issue is the 19 million out of 130 million....14.6%. But it also needs to be noted that the 130 million includes mobile homes, duplexes, triplexes, or other forms of attached homes. The single family detached home is critical as well....if it were 19 million of this category of home then it would be a very significant issue....but without this information all that can be said is more muddying of the waters to hide who is pulling the strings....less emotion and more reasoning (and knowing which is which) is in order.

Nov 02 09:58 AM

[Seth Chalnick:]

To those who say that actual foreclosures have not increased by as much as the author says.

That's not the point.

The point is that loan defaults have been increasing. And the problem is that there is no answer for the defaults. So the banks aren't even foreclosing anymore.

Nov 02 10:02 AM

[Old Rick:]

Mavericks, you probably have a 5/30 mortgage which is NOT the same as a 5 yr i/o mortgage. I've had 5/30 s several times in the past as a kind of play on interest rates. Your mortgage will not need to be refied after 5 as it will just go to the "index+2" (or whatever) interest rate and is good for another year. The 5 yr i/o OTOH needs a total refi and will start paying principal which was 0 on the i/o loan. The problem will be that the principal balance is now exceeding the value of the home, so there is probably an automatic default built in to the 5 yr i/o's
----------------------...
On Nov 02 09:00 AM mavericks wrote:

> I'm going to take the other side of this argument since I own one
> of those 5-year adjustable loans and I've been paying interest only
> on 4 of those years. As it turns out, my payments will go DOWN next
> year if LIBOR stays where it is.
>
> Second, I would think it would be in a bank's best interest to rent
> out, either to the former owners or somebody else, the homes they
> foreclose upon and try and wait for home prices to recover before
> putting them back on the market. If this is the case, would these
> homes be considered "empty"? Just asking.
>
> Frankly, I think the tone of this article is a bit on the emotional
> side so that is why I'm questioning it.

Nov 02 10:03 AM

[MichaelJ007:]

I don't think the difference in the 18.95-19 million is that big of a deal, considering all of the shades of gray that weren't included in the number in the first place (ie- banks keeping them off the balance sheet). The later parts of the article are good. I'm not ready to call shenanigans on Bloomberg quite yet. Home prices will continue to decline as inventories keep rising. If the GOVs of the world are able to continue to collude and fix interest rates, it will be easier to fabricate a recovery. That is the only objective as of now- fake it til we make it.

Nov 02 10:03 AM

[User 502011:]

The sky is falling! we should all start scouting out caves in our area for the impending apocalypse... or if you're semi rational (unlike the author) you'll realize, as most folks implicitly do, that we're better off now than we were 9-12 months ago. Housing will be the last thing to recover as/when the economy improves. So implying that there is no recovery because we're not seeing real improvement in housing is misleading. Employment will be the next to last thing to recover (hence housing being the last because folks will need jobs and/or an elevated sense of comfort before they'll buy new homes and/or upgrade).

The best thing is that as we see the economy improve there is a sense that its not being completely built on a build up of consumer spending which obviously creates a bubble. The reality is that over the last 5 years millions of folks bought homes (and lots of other junk) that they fundamentally couldn't afford and that spending was fueling the economy... hardly a formula for long term economic expansion. Things are looking up IMO, the companies that should be folding up shop are being allowed to - look at CIT this weekend - the market takes this news in-stride, in fact the market is up this morning as CITs demise was already baked into the market. Likewise, companies that were on the rope just a little bit ago are in much better position - F, MS, BAC, GE, etc. etc. Are there still loads of residual issues, of course there are but there no longer deadly. ISM numbers this morning again confirm that expansion is "in the works." but i'm sure you think those numbers are fabricated too. I'm guessing the author doesn't think we landed on the moon either.

btw, these type of articles IMO are of minimal value - they are conspiracy theories with no scientific method. e.g. if you want to make these claims also post some predictions and some ways to play it so we can look back at some point in the future and evaluate whether the author got it right or was just histrionic. If I had to back my vote with money, I'd be betting on histrionic.

Nov 02 10:24 AM

[secmaven:]

To foreigners holding dollars a residential property in a good location in the US is as better than gold. It is place of refuge from the miserable conditions in their own country for aged relatives and nephews and nieces looking for a good education. Housing prices in many locations have stablilzed as a result.

Nov 02 10:29 AM

[Buckoux:]

Yawn!

After Nielson's exaggerated comment about America's "Billion Guns", I've become immune to most statistics, real or imagined. I just always assume that the MSM, Bloomberg and Neilson are ALWAYs wrong and search for the facts on my own.

Hmm. A "Billion" guns divided by the population of the USA at 300+M ='s 3.33 firearms for every man, woman and child in America. Does the average family of four poses 13 guns? (note, I wrote, "average").

Disclosure: I obviously enjoy firearm sports and even I don't have 13 firearms as an individual. I also don't invest in any of Nielson's hustles.

Nov 02 10:35 AM

[Solon:]

I find it interesting that, to me , the real problem now is the maturing of the CDS. Few people seem to acknowledge the potential problem that this will cause.

Nov 02 11:25 AM

[Dirk McCoy:]

18.95 = 19. If the report had said 19.0, then you'd have something to complain about.

As for the bank foreclosure numbers forcing this number higher, don't overlook the significant sales in the low end of the market this year. Many first time homebuyers (and others) took advantage of the tax credit.

And it's been obvious for over two years that the housing market could precipitate a collapse of the entire economy (based not only on asset bubble collapse but a total loss in confidence in trade and money). The question- "what to do about it?"- was the subject of a few of my articles, and while the Fed has not monetized as much debt as I would have liked, they have at least created the impression that they were going to. Now that the dollar is falling, labor rates stagnating, commodity prices rising- the US has a better chance to work to pay off its debt- as long as we don't create a non-productive nanny state.

Nov 02 11:29 AM

[joes:]

Where did you get that Nielson's info, every study that I've seen has the numbers ranging from 250-350 million, we can't know exactly because of the strange culture around guns.

I obviously don't enjoy guns as they make young kids into killers and old men into fools.

Everyone likes to search for the facts that meet our objectives, but that isn't a reflection on the field of statistics, it is a statement about the way that our brains work.

The


On Nov 02 10:35 AM Buckoux wrote:

> Yawn!
>
> After Nielson's exaggerated comment about America's "Billion Guns",
> I've become immune to most statistics, real or imagined. I just always
> assume that the MSM, Bloomberg and Neilson are ALWAYs wrong and search
> for the facts on my own.
>
> Hmm. A "Billion" guns divided by the population of the USA at 300+M
> ='s 3.33 firearms for every man, woman and child in America. Does
> the average family of four poses 13 guns? (note, I wrote, "average").
>
>
> Disclosure: I obviously enjoy firearm sports and even I don't have
> 13 firearms as an individual. I also don't invest in any of Nielson's
> hustles.

Nov 02 11:32 AM

[seekingnorm...:]

3Q08 18.8m
4Q08 19m record
1Q09 18.95m new record

4Q08's rounded up 19m could have been anything between 18.81m and 18.94m. Don't see the problem.

On track to foreclose 5m and sell 1.5m
1) These are presumably "on track" for 2009. Why would they be added to 2008?
2) Whatever net foreclosures ocurred in 2008 would already be in the "empty" numbers.
3) Whether foreclosed but rented to previous (and unfortunate) owners is classified as empty is a good question to ask too.

Perhaps you should check the methodology of the sources Bloomberg quoted before making these assertions. You might also want to be more rigorous in your approach.

Not saying you're wrong but that your saying it wrong!

Nov 02 11:34 AM

[Jeff Nielson:]

I thought I was clear about this, but there were several comments on this point - so let me go through it again.

At the end of 2008 (i.e. LAST year) Bloomberg reported "an all-time record" of 19 million foreclosed homes. To add more detail, this number was ROUNDED OFF to 19 million. Since no propagandist would ever OVER-STATE this number, we know it was at least 19 million - and potentially as high as 19.4.

NOW, Bloomberg is saying that in the FOLLOWING quarter (i.e. the first quarter of THIS year), that the NEW "all-time record" was 18.95 million (notice how they use TWO places of decimals to avoid calling this 19 million?).

Meanwhile, as I have demonstrated in many commentaries, U.S. banks have ADDED millions of NEW empty homes to that total. The size of the lie is NOT the difference between the FIRST "all-time record" and the SECOND all-time record, it is the difference between the OFFICIAL number and the REAL number (somewhere above 22 million).


On Nov 02 09:24 AM cyaker wrote:

> While I don't deny anything Nielson says or the other commentators
> above, for that matter nor am I defending Bloomberg but a .003 roundup
> (18.95/19) in this case is scant evidence that Bloomberg is massaging
> the numbers. It does give one pause for thought.

Nov 02 12:24 PM

[Jeff Nielson:]

Mngordo, this is just another variation of "shoot the messenger". If a comet was due to strike the Earth in two weeks and wipe out all life, would you rather KNOW about it (and "party like it's 1999"), or would you rather remain in the dark - tucking money away for your "retirement"?


On Nov 02 09:24 AM mngordo wrote:

> My comment to the author: "Silence is golden".
> If the world is going to end, I think I would rather not know it
> in advance but thanks for your research.

Nov 02 12:28 PM

[Jeff Nielson:]

Hi Ani4Ani.

This point was made by a previous commenter. After reading the comment, I went and re-checked my sources, and I have also kept close watch on the WORDING of subsequent stories on U.S. foreclosures.

There is NO EVIDENCE that the "headline" number reported by U.S. news agencies represents TOTAL foreclosure "notices" rather than FINAL proceedings.

To start with, NONE of these news stories makes this factual distinction. This would mean that EVERY U.S. news organization would be guilty of INCREDIBLY sloppy journalism - AND making the U.S. housing market look much WORSE than it really is.

Anyone who believes these propagandists would OVER-STATE the severity of the U.S. housing crash simply doesn't spend much time on Planet Earth.

Secondly, the number people are interested in are FINAL foreclosures - not initial notices. No one cares about how much paper is being pushed, what is RELEVANT is how many Americans are losing their homes.

Thus, for your interpretation of the data to be correct, this would mean that all U.S. news organizations are engaging in incredibly sloppy journalism, providing IRRELEVANT data in those reports, AND making the U.S. housing crash look much worse than it really is - despite spewing propaganda every few DAYS which claims the housing sector has "bottomed".

Such an interpretation of the facts simply is not credible.


On Nov 02 08:04 AM Ani4Ani wrote:

> This isn't accurate. Actual foreclosures this year are only at 670k.
> The 300k to 350k that RealtyTrac reports each month is the total
> of foreclosure NOTICES and foreclosures. But foreclosures only average
> about 75k a month across the US. The pipeline of foreclosure in process
> held up due to HAMP is massive though - probably 1.5 to 2 million
> at this point. The shadow foreclosure problem has by and large been
> solved temporarily because of various foreclosure moratoria, mortgage
> mod initiatives and the busy low-end selling year in 2009.
>
> It will be accurate, however, when 70% fail their mods which will
> result in foreclosures surging likely over the near term. The question
> is...is there enough investor and first time buyer demand to sop
> it up. The big problem with housing right now is the mid to high
> end which has fallen off the same cliff as the broader market did
> in 2007 and is picking up speed on the way down.

Nov 02 12:37 PM

[rlreber30t:]

To everyone on SA; THANK YOU.
Your articles and comments provide a plethora of "food for thought".
Please don't stop!! My IRA is up 400% from March,09.

Nov 02 01:24 PM

[User 504486:]

Do you need to?


On Nov 01 12:41 PM Gary A wrote:

> I was thinking that the author may want to look into the retail sales
> numbers. I think those are fudged as well but how would we prove
> it?

Nov 02 01:24 PM

[Buckoux:]

"Where did you get that Nielson's info,..?"

From one of his articles a few months ago. Like most bon mots of intended condescension, his number was retrieved from a place that rarely receives sunshine. To be polite.

" we can't know exactly because of the strange culture around guns."

Indeed?

"I obviously don't enjoy guns as they make young kids into killers and old men into fools."........

Obviously.


On Nov 02 11:32 AM joes wrote:

> Where did you get that Nielson's info, every study that I've seen
> has the numbers ranging from 250-350 million, we can't know exactly
> because of the strange culture around guns.
>
> I obviously don't enjoy guns as they make young kids into killers
> and old men into fools.

Nov 02 01:33 PM

[granger:]

Thanks again, you have done a great job. I do not know if you are wrong or right (beleive you are right).

But does now matter, because all you have to do is be 25% or 50% and it scares the hell our of me. It should scare everyone.

I am as defensive as I have ever been for a week plus.

Nov 02 01:55 PM

[User 504486:]

I know it's anything but funny, but I couldn't help laughing at your first sentence.


On Nov 02 01:14 AM chris coonan wrote:

> I get a lot of comments from friends, stating, whew, it is all over,
> glad things are back on track....I can't even respond anymore.<br/>
>
> It is good that there are optimists out there.
>
> The statistical game is proving to be very interesting....so when
> the economy collapses, do they just revise the previous statistics?
>
>
> Seems like we are living in the book Animal Farm...rules changing
> in the middle of the night, etc. Or perhaps 1984..., the economy
> will be retreating to that year anyway....

Nov 02 02:56 PM

[Old Wizard:]

I thought that the amount of mortgage money out was about 11trillion. If the derivatives created a 30 to 1 leverage and 10% defaulted, we would have a 30 X 1.1 trillion or 33 trillion problem. What the actual default rate is now is somewhat difficult to ascertain, but let's say it's half that amount which results in 16.5 trillion. While this is not nearly what the author computes, it is still a formidable amount. While much deleveraging has already transpired by bank and financial institution failures and other losses, I believe we are bearly past the half way mark. It is not clear that the existing gov. policy will not result in much of the remaining burden being borne by the asset holdings of those in the country who retain net positive assets, whose personal cash flows are positive, and have savings. For starters, we should put a moratorium on new home and building starts, Impose financial rules which restrict any financial instrument to be based on one actual asset[ a motgage can only be sold once, eg], Make commodity buyers pay at least 50 cents on the dollar and restrict individual short sales to no more than .0001% of asset value or market cap. We need the will to fix the problem and there will be pain, but I for one think our way of life is worth saving.

Nov 02 03:07 PM

[Tony Daltorio:]

You really should take up comedic writing - your comments were the funniest I've seen in a long time.....pretty good for someone who has apparently been living under a rock for the last two years.


On Nov 02 10:24 AM User 502011 wrote:

> The sky is falling! we should all start scouting out caves in our
> area for the impending apocalypse... or if you're semi rational (unlike
> the author) you'll realize, as most folks implicitly do, that we're
> better off now than we were 9-12 months ago. Housing will be the
> last thing to recover as/when the economy improves. So implying that
> there is no recovery because we're not seeing real improvement in
> housing is misleading. Employment will be the next to last thing
> to recover (hence housing being the last because folks will need
> jobs and/or an elevated sense of comfort before they'll buy new homes
> and/or upgrade).
>
> The best thing is that as we see the economy improve there is a sense
> that its not being completely built on a build up of consumer spending
> which obviously creates a bubble. The reality is that over the last
> 5 years millions of folks bought homes (and lots of other junk) that
> they fundamentally couldn't afford and that spending was fueling
> the economy... hardly a formula for long term economic expansion.
> Things are looking up IMO, the companies that should be folding up
> shop are being allowed to - look at CIT this weekend - the market
> takes this news in-stride, in fact the market is up this morning
> as CITs demise was already baked into the market. Likewise, companies
> that were on the rope just a little bit ago are in much better position
> - F, MS, BAC, GE, etc. etc. Are there still loads of residual issues,
> of course there are but there no longer deadly. ISM numbers this
> morning again confirm that expansion is "in the works." but i'm sure
> you think those numbers are fabricated too. I'm guessing the author
> doesn't think we landed on the moon either.
>
> btw, these type of articles IMO are of minimal value - they are conspiracy
> theories with no scientific method. e.g. if you want to make these
> claims also post some predictions and some ways to play it so we
> can look back at some point in the future and evaluate whether the
> author got it right or was just histrionic. If I had to back my vote
> with money, I'd be betting on histrionic.

Nov 02 03:51 PM

[Patrick09:]

Still like Bloomberg Radio/TV better than any of the other biz shows....I like the Bloomberg Surveillance show in the mornings best...

Nov 02 06:43 PM

[GoldLovingP...:]

Jeffy,
All you do is call everyone, everything, every establishment, most all governments liars. You appear to be the biggest liar of them all. Most of your writing is from a twisted and bias view point, and it is so far twisted from reality that no normal people will ever take you seriouly. There must be a mental health issue involved that you really should have looked at by a profesional. No disrespect meant but it has to be said.

Sincerely,
Goldey

Nov 02 07:06 PM

[datadave:]

These numbers seem unreal, including Jeff's. I doubt there are that many "empty" homes. Maybe more than that are "unwater" financially homes too expensive for the market place, but "empty" I doubt. There are numerous ways a developer, 'flipper', bank, or double house/little income can fill a home w/o selling it. Reduced rent for keeping the place up, short sales unaccounted by current stats, or just renting a home still up for sale.. thus reducing rents overall which I've heard is a good thing for renters but not landlords. Maybe the Bloomberg statistic is is just acknowledging the reality that Jeff misses: that owner's of property need to maintain it and it's best to have some sort of occupant.. even a 'deadbeat' but non criminal occupy the many so-called empties that aren't actually empty. Jeff's number would be unsustainable on a ground level due to the overhead of keeping unoccupied proprieties salable.

Nov 02 07:27 PM

[joof:]

Amazing but true

NO One on this thread actually read the article and understands the numbers. That actual number of excess units- housing vacant above trend- is a fraction of this large number

Three items make up the 19 MM - vacant for sale, vacant for rent ( including apartments) and seasonal (second homes). About 1/3 of the total comes from each.

Seasonal homes by definition aren't excess - they don't compete for primary occupancy in most markets. In this kind of world many will try to dump the beach house or Vail condo, and prices for second homes are very soft- just like in any recession. But that really doesn't directly affect most primary housing markets.

On for rent (apartments) nation vacancy is about 7.3% , or about 2% over what owners would like. Say that means 1 MM excess housing units.

On for sale most analysts would say that that the current vacancy rate is about 2x the norm - say another 1 MM excess units

19 MM really means 2 MM excess - about 1/2 year of gross demand. A problem - true - but not a cataclysm

Nov 02 08:10 PM

[The Dark Years:]

The housing market is dismal and despite the many commentators, pundits, forecasters, insightful gurus, and talking heads hinting at recovery I am not optimistic. They use dubious statistics based on false premises that are more wishful thinking than akin to reality. It is not getting better soon.

I do live in what could be called ground zero. Here in Orange County the boom was just great, until it was not. Our home was purchased in November 2001 for around 700K and rose to around 1.450k in fair market value in late 2006. It is 3400 square feet in a great gated community, but were we to sell today I would market it for 1.150, and take 1 million. If you could get the cash together today to buy a new home in Woodbury, a close proximity new community, 600-700k would buy you a 1900 to 2300 square foot home that was almost a zero lot line and encumbered with dual association fees as well as hefty taxes of 1% to the state, and another .08% in Mello Roos bond expense. We are staying the course, but many of our friends and neighbors have not been able to do so. Some had jobs with the mortgage and banking industry at excessively high compensation levels and lost much of the wealth they had acquired as they over invested in homes and rental units that were heavily geared. Some moved to the mid west and and began a new life with much less expectation of acquiring wealth through real estate ownership. Most do not discuss their personal situation, but you can sense their fears about the future. Looking around they appear to be justified.

We live near an Irvine Company development called "Orchard Hills" which WAS projected to have around 4000 or so homes and was anchored to a very upscale Shopping Center which was built. None of the houses have even been started although they could have been ready in late 2007. Signs announcing the project said they would be available in 2008, then 2009, then 2010, and then the signs disappeared. All of the paved primary roads are in place, as are the underground utilities and landscaping. Some of the communities entrances even have their fake Italian guard towers in place. The various builders who have committed to construct homes there and paid premiums as advances for rights to build must be in great fiscal pain. The anchor shopping center has many vacant building and the shops that are open are not doing well. The upscale, and expensive Von's Grocery is usually empty, and almost no one uses the CVS drugstore. It is no problem to get a table at the expensive and trendy Zavs' Restaurant. I would guess it could be several years before construction is restarted, if it ever is and all the while there are great carrying costs by the developer, and the home builders to participate in a project that might not come into being. The shopping center tenants are stuck with hard leases and have little recourse except to stay the course and tough it out.

These observations from the ground level, rather than from some cloud on which sit the anointed cognoscente leave me believing that we have not seen the worst of the great housing bust. Those who claim a recovery are just fooling themselves and those who believe them.

Nov 02 11:58 PM

[GreatWhite:]

"If you take the billions in losses which U.S. banks are racking-up on foreclosed U.S. properties, and then start making 300:1 pay-outs on those losses, it doesn't take long for the entire U.S. financial system to appear hopelessly insolvent – even with the new, fraudulent accounting rules enacted in the U.S. in April."

You find an instance of something that is wild and glutinous and now that instance is the "Norm". All your "Bankersters" passing insurance back and fourth who cares what the pay out it. So Citibank pays Goldman's Sachs $100 Billion and then Goldman pays someone else off on a CDS they issues. It is all paper swapping, but to you it's the end of the world because "entire U.S. financial system to appear hopelessly insolvent " This is a zero-sum gain but your pea brain has to sensatilize everything for the end of the world scenario.

Then:
"Obviously, if there were 19 million empty homes at the end of 2008, and at least 3.5 million more empty homes this year (just counting only those being held by U.S. banks), then the real total of U.S. empty homes today would be at least 22 million. Clearly, Bloomberg's claim of 18.8 million empty homes in the U.S. in the 3rd quarter of this year has absolutely no connection the real world.

Well how about some elementary school math. Were selling 5.5 Million homes a year and over 40% are foreclosed to that gets us 22 Million minus roughly 4 Million SOLD homes AND LOW AND BEHOLD 18 Million Foreclosed homes. It's not rocket science, it's probably 3rd grade math and you obliviously can't handle that.

Your articles are D&G Garbage as usual.

GreatWhite

Nov 03 12:36 AM

[Scott Croly:]

This is a reasonable comment regarding US citizens' duty to obtain at least de minimus understanding of finance, market, and economy. The author of the above article makes good points regarding discrete data report, which, by analogue is, is apparent statistical artifice purveyed by private and public instiution market and government sinecured staff nominals. This is evident, even though banking/central trading cycles recur and are somewhat reasonable over the generations, when, for example, the implication is made that endless "paper-swap" is harmless, that nearly constant nominal markets are feasible, inspite of a universe wherein existential progress is materially and manifestly compelled in human terms; that macro-Newtonian reality can take an exit as humanity has somehow conquered the need for real economy, that currency is mere nominal transfer of permanently secured wealth, that consumption and extraction with commensurate organizational, behavioral "intelligence" prevailing over individual cerebral intelligence can continue unabated over production and earnings, implied at one point during the previous cycle when it was said that we had arrived in the "information age" with nominal, static capital banks somehow being synonymous with real, dynamic capital corporate business; all of this absurdly stated in what is always and obviously, in all terms and respects has been over the past, is now in the present, and will be in the coming and maximally foreseeable future, a differentiable calculus with some reasonable, contemporaneous, then subsequent integral application over time. In the final analysis, it is movement, rather than the measure of that movement, that takes precedence. Primary beats derivative; policy prevails over tool. Furthermore, it is interesting that financial, market, and economic history are neglected in public, and even private schooling 101. From all standpoints, it makes for a fascinating study, as well as front-end, providing some deterrent to basically simpleton, offically sanctioned bank robber baron textbook staff, most of whom are really quite transparent, and have been all through the last cycle, particularly the final eight year retail cap -- hey, gotta love that TNX/DJIA config over the last generation, for instance, with some particularly blatant examples of "set-up city" -- nah!!! I must be some kind of conspiracy nut -- NOT! Any system staff/house/sinecure attached to -$20 Trillion USD debt (a reasonable average of public and private sector debt, 11/2008) has absolutely NO credibility to begin with in diagnosis, as in "reporting" and "interpreting" 'statistics'; and most especially when credit/debit pathology is pandemic to the recent past and is still apparent in the presently commissioned, who, in all absurdity, purport prognosis, as in making any buy/sell recommendations, self-serving forecasts, etc... With respect to P & D, the institution mentioned above is quite fluent thereon; specific push is evident, particularly over the last year, with logistical specifics duly notable -- hey, it's business -- as a listener, do your own due diligence. Still, some analysts are quite able and informative, and data feed, such as it is, is quite thorough. Seeking Alpha is a good and informative, even entertaining site, with capable authorship and reasonable, perceptive commentary, about a really frustrating, difficult, and even potentially dangerous period in world and American history, at least relative to more stable periods in market and economy in times passed, though certainly far worse times than present days have been endured at certain junctures in the past. Regardless, more sanguine days always beckon, one way or another. Perhaps in the end, line citizenry, and system, both of which are quite good, will prevail over the obviously severely impaired staff/house/sinecure leg, before the whole tripod affair takes a near/medium term swan dive. Nominal bank/trade/private expansion dievestment [sic] of previous inefficient, "real" business/corporate/soc... model does occur, and arguably, has its place, particularly as a somewhat ordered trade digression with some, though not entire, positive horizon expansion; this is obviously and infinitely preferable to potential all-out incipient conflict. Nevertheless, at this point, as is certainly indicated principally by geoolitical dislocation, then mass market consensus regarding those sectors evidencing the recent, highest relative equity price gain, it is the former nominal, not the latter period, which has displayed current obsolescence. Time to get real.


On Nov 02 08:25 AM adan wrote:

> two things:
>
> and the worst of all these misrepresentations has been and will be
> a continued mistrust in large financial institutions by most regular
> people; this could take a lot of work and time to heal -
>
> and, if our stats are bad, what are we to think of the chinese (or
> any other country whose data we can't begin to hardly analyze) reports?
>
>
> but it's a two way street, i think - the average american will have
> to care enough and be willing to put enough effort into learning
> about the economy and finance, to force our own elected officials
> to give us the honest adult truth - something we could work from,
> for sustainability....

Nov 03 07:03 AM

[highwaytose...:]

Housing is a prime example of Cap and Tax plain and simple. Sector rotation is needed. A number of years ago there was an article which stated that John Templeton and Buffet warned that derivatives had housing overpriced by a factor of ten. Now I am rather simple and look at things in an income/cash flow basis. Now with the household numbers on income are census based and very unreliable and very lagging. If you model for unemployment and factor average price for say 4 times income you begin to see the trouble. The September housing propaganda and reporting the omission was that prices dropped 8.5% YOY making the average house $179,900. This means that 8000 dollar credit which accounted for a great deal of the market was lost now the January low of $164,000 was boosted by cash for plywood ponzi.. The real shame is sinecurist economy of banks, realtors, lawyers, sheriffs, inspectors wasting time in a non income producing sector. We have lost a generation of talent of skilled workers at a cost of losing the creative talent to other countries.. A skilled MIT graduate working on a hedge fund data base? Heck you have guys getting Noble prizes on pricing models that defy the boundary limits of physical reality.. We can complain but sector rotation is what is needed. Too bad the government is not willing to cut spending on sinecurist sectors... I just don't get it $250,00 for job creation for what more teachers and government workers? I am also optimistic in the talent and moral responsibility of free markets.. They will work and the hope is the old boys don't get desperate and add the Keynesian and war models of prosperity..

Nov 03 07:24 AM

[User 227743:]

You are WAY off base---Bloomberg reports a government number--they do not make up their own numbers--the government will occasionally revise numbers so Bloomberg reports the new revised number.

Nov 03 11:21 AM

[aminorex:]

This is just bad math. 19 million is neither more nor less than 18.95 million: The two numbers have different degrees of precision. The first is only precise to within 500,000, while the second is precise to within 5,000. The actual value which generated the 19 million report could be anywhere from 18.5mm to 19.5mm. The actual value which generated the 18.95 million report could be anywhere from 18.945mm to 18.955mm. Bloomberg was just reporting the numbers. Moreover the numbers are subject to revisions for accuracy, as new data becomes available.

If I were Matt Winkler, I'd sue the author for libel.

Nov 03 11:50 AM

[mkttrdr:]

Now that's what a reporter should do.
Great job again Jeff.
The truth hurts but at least we are alive and can deal with it.
20 Million homes that no one pays property taxes on!
Stew on that.

Nov 03 11:56 AM

[Buckoux:]

Thank you for posting, politely, what I was thinking. Suffering fools gladly is not one of my virtues.


On Nov 02 07:06 PM GoldLovingPuppy wrote:

> Jeffy,
> All you do is call everyone, everything, every establishment, most
> all governments liars. You appear to be the biggest liar of them
> all. Most of your writing is from a twisted and bias view point,
> and it is so far twisted from reality that no normal people will
> ever take you seriouly. There must be a mental health issue involved
> that you really should have looked at by a profesional. No disrespect
> meant but it has to be said.
>
> Sincerely,
> Goldey
>
>

Nov 03 01:35 PM

[lower98th:]

But of course someone pays the taxes.....see the tax certificate sales. And in three years, the owner of the certificate can have the property entered into a tax sale...and it goes to the high bidder, or by default to the certificate owner. And in some cases municipalities are stepping up this process.....So the banker/foreclosers will have to get moving or will be bidding at tax sales for properties they were slow to foreclose.

> Million homes that no one pays property taxes on!
> Stew on that.

Nov 03 01:45 PM

[geewow:]

I am glad to see someone else finally calling the scam as a financial crime syndicate operation. I have been calling it that for two years.

The article is a good read and lays out what is being hidden inside the mortgage banking market.

eye-on-washington.blog...

Nov 03 07:14 PM

[a fat panda:]

"Second, I would think it would be in a bank's best interest to rent
out, either to the former owners or somebody else, the homes they
foreclose upon and try and wait for home prices to recover before
putting them back on the market. If this is the case, would these
homes be considered "empty"? Just asking"

PLEASE NO!

First, banks don't understand the rental housing market, which is a capital intensive/low marginal business. Giving them money at low interest to invest in low margin business is a receipe for national disaster. If you think this is a good idea, it is because you have never rented property to a devil worshipper. I have.

This only reason that this sound even reasonable is because we as a nation have done something even more foolish. We are giving bankers cheap money so that they can comfortably hold on to the mistakes of the past as vacant property.

This is a true story from a stock named ACME, ticker ACU. They wanted to get rid of a property so they leased it to a person for $1. I am not sure what that person did, but it left ACME with a EPA entanglement that cost the company more than a million dollars to get out of.


On Nov 02 09:00 AM mavericks wrote:

> I'm going to take the other side of this argument since I own one
> of those 5-year adjustable loans and I've been paying interest only
> on 4 of those years. As it turns out, my payments will go DOWN next
> year if LIBOR stays where it is.
>
> Second, I would think it would be in a bank's best interest to rent
> out, either to the former owners or somebody else, the homes they
> foreclose upon and try and wait for home prices to recover before
> putting them back on the market. If this is the case, would these
> homes be considered "empty"? Just asking.
>
> Frankly, I think the tone of this article is a bit on the emotional
> side so that is why I'm questioning it.

Nov 03 07:23 PM

[Jeff Nielson:]

Bloomberg is a multi-BILLION dollar business which SELLS "news" to the masses.

The fact that these so-called "journalists" do little INDEPENDENT research doesn't absolve them of responsibility for the truth/accuracy of what they publish.

The U.S. Census Bureau doesn't have a daily audience of millions of people - Bloomberg does. And (as I pointed out) as a multi-billion dollar business they clearly have the resources to FACT-CHECK their articles so that they don't publish NEW pieces which contradict their old pieces.

Finally, after mentioning the U.S. Census Bureau ONCE, the writer essentially adopted the numbers as his own. The only way for Bloomberg to disassociate themselves from a number they reported as FACT is to express some skepticism about the number or (better yet) to point out the PREVIOUS contradiction.

As for the petty remarks that such a small discrepancy doesn't matter, I already replied to this point once but for those who don't/didn't read all the comments, I'll touch on it again.

1) the REAL number of empty homes is soaring higher, thus the size of the lie is not the difference between the first number, and the phony second number, it's the difference between the phony second number and the ACTUAL number of empty homes (well over 20 million).

2) To be successful in propaganda, you don't try to get people to swallow HUGE lies all at once, you "move the goal-posts" gradually - so that hopefully no one notices the fabrications.


On Nov 03 11:21 AM User 227743 wrote:

> You are WAY off base---Bloomberg reports a government number--they
> do not make up their own numbers--the government will occasionally
> revise numbers so Bloomberg reports the new revised number.

Nov 03 07:47 PM

[nowayjose:]

What I find interesting in all this is how many Americans are affected by our current economic condition and are angered by it, yet nothing is being done. Everyone seems to be pointing a gun to Goldman Sach's head, and everyone believes they're guilty, but nobody is brought to justice.

We bitch on blogs and pat ourselves on the back for speaking our peace. Pre-internet, people would gather to complain, then protests would result from angry mobs collaborating. It's almost as if the Internet is the Government's greatest weapon; it disperses uprisings. Funny how the Internet was created by the Military.

While this sounds very much like some whack job with a conspiracy theory, I have a hard time believing that the military would imagine blogs defeating public protests so many decades ago, yet, I still find it interesting that we've become disfunctional masses... pushovers. "Please steal from me, I won't do anything about it."

Nov 04 02:25 AM

[Miami says:]

You can make a million, two, ten, twenty and maybe fifty by working really hard in this country, but in order to make a Billion you have to be corrupt within the banking system...

The irony is that if a small thief robs a bank for $10,000 and gets cut, he goes to prison, but if a bank robs a billion (plus bonuses) in front of us while screwing everybody, it gets a Bailout...!

(This crime syndicate is really organized...)

One more: of course Wall Street works as the biggest pyramid of them all, where insiders enlarge their holdings on an exchange on a continued rise by using paper profits as margin to buy additional amounts (while protected by the above crime syndicate)...

On Nov 03 07:14 PM geewow wrote:

> I am glad to see someone else finally calling the scam as a financial
> crime syndicate operation. I have been calling it that for two years.
>
>
> The article is a good read and lays out what is being hidden inside
> the mortgage banking market.
>
> eye-on-washington.blog...

Nov 04 11:48 AM

[Steve Owen:]

It's not hard to find:

realestate.msn.com/art...


On Nov 02 08:46 AM Dubious Brother wrote:

> Does anyone know which states represent the top 5 in foreclosures
> and what % of the total they make up?

Nov 06 09:39 AM